Coinbase Obtains Canadian Registration Despite US Regulatory Troubles

Coinbase Obtains Canadian Registration Despite US Regulatory Troubles

On Wednesday, Coinbase announced that it had become the first crypto exchange that was registered in Canada.

This saw it achieve the regulatory progress that it has been unable to manage at home i.e. in the United States.

The registration

According to a blog post, Coinbase had filed its pre-registration undertaking in Canada almost a year ago and it is now a ‘Restricted Dealer’ under the oversight of the Canadian Securities Administrators (CSA).

This registration implies that Coinbase is compliant with the strict legal requirements in Canada when it comes to investment access and crypto trading.

Some of these requirements include a ban on crypto leverage and a high bar for compliant stablecoins.

Due to these requirements, many companies, such as Ledn and Kraken have restricted their offerings in Canada, while others like Binance have completely exited the country.

However, Coinbase has said that the market in Canada is worth all the effort. The Canadian Country Director of Coinbase, Lucas Matheson talked about the country’s importance.

He said that their population is technology-savvy and highly educated and has an understanding of the digital economy.

The company said that Canada ranked as the third-most crypto-aware nation as per Coinbase, globally. He added that their brand in Canada as a publicly traded company was strong.

He also said that it was committed to compliance as well as registration in other parts of the world as well.

The details

As per the definition of the Canadian Investment Regulatory Organization (CIRO), the term ‘Restricted Dealer’ is used for dealers that do not fall under a specific category.

These include Portfolio Managers, Mutual Funds, or Investment Dealers. Instead, restrictions and requirements for Restricted Dealers are devised by securities regulators according to the specific company.

This ambiguity is a reflection of the growing pains of the crypto industry in politics, as policymakers and regulators are debating on how to fit the asset class in the financial laws that already exist.

Plus, they are also developing new laws to accommodate it in a better way. Canada’s regulators have frequently been credited by Coinbase for their cooperation.

The background

According to Coinbase, Canadian regulators have worked on a legal framework that encourages both consumer protection and innovation.

The company said that it had collaborated with Canadian investment advisors, banks, and pension funds to demonstrate its dedication to facilitating successful navigation of the evolving digital asset industry.

In the last year, Coinbase has also managed to secure registration in other countries, which include Singapore, Spain, France, Ireland, the Netherlands, and Italy.

As for the United States, the crypto exchange is embroiled in legal battles with securities regulators over whether most cryptocurrencies should be classified as commodities or securities.

Last week, Coinbase’s motion to dismiss the lawsuit was denied by a judge, which shows agreement with the claim of regulators that crypto also falls in the same legal framework as securities.